Every year more Ghanaians lose money because of wrong typical financial advice and bad decision making. Without the right knowledge and products, your finances will only get worse by the day.
But you will also need to avoid these 5 common mistakes people make with their money so you can protect, secure and grow wealth for financial freedom.
Here are the 5 common mistakes I advise people on to overcome every single day.
MISTAKE #1
Not Saving Enough
To be financially free, it is important to save enough and not just save.
A client asked, what is enough? As a general rule of the thumb, you should be saving at least 10% of everything you make in income/salary or profit 20% of all income should be used to build an emergency/endowment fund for you and the family.
70% is for living expenses (food, shelter, insurance, car payment, groceries and transportation etc.)
This is the 10-20-70 rule and it works like a charm.
MISTAKE #2
Keeping Money in the Wrong Place
Licensed financial institutions by Bank of Ghana are qualified place for people to keep their money.
However, because of the recent banking crisis, it is critical to seek advice from a professional or expert before you deal with any financial institution.
You need to be very sure of where you keeping your money because your financial progress depends on the financial institution you dealing with.
Charges, fees, penalties, balance sheet, and the board of directors, market volatility are things you need to also consider before keeping your money with a particular financial institution since they are critical in the growth process.
You can again, sign on to a good insurance plan that takes care of your financial goals. Always keep your money with financial institutions that makes it easy for you to access your money and with no or little charges/penalties.
MISTAKE #3
Getting the Wrong Product
Getting the wrong product that does not fit/meet your needs can cost you lots of money and time.
3 quick questions to ask that will help you avoid a bad product:
v Are there any charges/fees/penalties which are not disclosed?
v Do I have un-restricted access to my money?
v Will this product meet my goals and is it sustainable?
If there are charges/fees and penalties make sure you fully understand what they are and when they can be charged.
IMPORTANT: Do not move forward if you are not fully convinced. Only purchase a product when you are comfortable and certain of what you getting.
MISTAKE #4
Not Taking Action
Taking action and making the right decisions is a must in order to secure your financial future and freedom.
Bottom line: When you know what you need and the product fit your goals, take action.
MISTAKE #5
Investing
All the very successful and financially free people have taken action to secure their money, there are 4 financial discipline that you must get right:
v Protect
v Save
v Manage
v Invest
It is always the best to get protection for your money, save enough, manage your savings and then start to invest the money to grow it. Find a good investment product and diversify your portfolio.
Written by: Jerry. J. Afolabi
